Misrepresentation, Non-Disclosure and Breach ... - Law Commission

Table 2: Consumer cases: main information not disclosed
No. %
Health issue 129 68
Previous claims/losses 20 11
Criminal charges/convictions 12 6
Identity of car driver/owner 7 4
Car specification/modifications 3 2
Cracks/history of subsidence 3 2
Value of property 3 2
Other 13 7
Total 190 100
C.11 The preponderance of disputes about critical illness and permanent health cover
meant that many policyholders were suffering from serious illnesses at the time
they brought their complaint to the FOS. As Table 3 shows, around two thirds
suffered from some form of illness or disability. A quarter suffered from cancer.
The seriousness of the problems is shown by the fact that at least 16
policyholders had died by the time that their claim reached a final decision. This
high level of illness and disability clearly affects the ability of policyholders to
pursue complaints, and puts additional pressures on the FOS.
Table 3: Consumer cases: policyholders with illness or disability
Policyholder suffered from No. % of all
consumers
- Cancer 47 25
- Multiple Sclerosis 22 12
- Severe back, neck or joint pain 12 6
- Heart disease 9 5
- Parkinson’s disease 3 2
- Other physical illness/disability 23 12
- Mental illness/disability 7 4
All with a physical or mental disability 124 65
Base 190 100
The £100,000 limit
C.12 Life and critical illness claims may be worth a considerable amount of money. In
most cases the ombudsman did not discuss the potential value of the claim,
confining their decision to whether or not the policy should be avoided. However,
the value of the claim did become an issue if it appeared that it may exceed the
£100,000 limit, under which ombudsman awards are binding on insurers. In four
consumer cases, it appeared that the £100,000 limit would be exceeded but the
parties nevertheless agreed to ask the ombudsman to make a (non-binding)
recommendation. The largest claim was valued at around £250,000.
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